Labor Force Participation to Decline in 2023

PRNewswire (01/09/23)

The Conference Board Employment Trends Index declined in December to 116.31 from a downwardly revised 117.14 in November. “The number of employees working in temporary help services—a component of the ETI and an important leading indicator for hiring—has fallen for five consecutive months and may foreshadow weaker job gains or even job losses in other industries,” said Frank Steemers, senior economist at the Conference Board. “In addition, wage growth seems to be gradually slowing compared [with] early 2022, although it is still significantly higher than its prepandemic rate.”

Steemers added, “Looking ahead, we expect the [U.S.] Federal Reserve’s rapid interest rate hikes to have a more visible, negative impact on the economy and job growth as 2023 proceeds. By yearend, we forecast the unemployment rate to rise to about 4.5% and labor force participation to decline to 61.8%—from 3.5% and 62.3%, respectively, in December 2022.”

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